Tencent-backed AI firm QuantumPharm seeks to raise funds, marking a milestone for Hong Kong’s pre-revenue IPO rules
- Company also known as XtalPi aims to raise up to HK$1.13 billion (US$144.5 million) in an IPO from Tuesday
- The lukewarm response to the Chapter 18C rule up to now has more to do with a weak overall capital market than the regime itself, analyst says
Tencent-backed artificial intelligence (AI) drug researcher QuantumPharm is raising up to HK$1.13 billion (US$144.5 million) in a Hong Kong initial public offering (IPO) from Tuesday, eyeing the first listing under a new regime for pre-revenue specialist technology firms that was introduced more than a year ago.
The Shenzhen-headquartered company, also known as XtalPi, is offering 187.37 million shares at HK$5.03 to HK$6.03 each. The shares will start trading on June 13.
QuantumPharm is one of only two firms that have applied to list under the Hong Kong stock exchange’s Chapter 18C rule since bourse operator Hong Kong Exchanges and Clearing introduced it in March 2023 to entice technology start-ups to raise capital. Black Sesame International Holding, which makes chips for autonomous driving, is the other candidate.
Wen Shu-hao, QuantumPharm’s chairman, said at a media briefing on Monday that the firm is “very fortunate” to potentially become the first company under Chapter 18C.
“We hope that our successful listing will attract more outstanding and top global technology companies to list under 18C,” Wen said, adding that the firm also hopes to help develop Hong Kong’s scientific sector and talent.
Chapter 18C allows companies with at least HK$10 billion in valuation to sell shares in IPOs, even if they have yet to earn a single dollar in sales. The threshold will be reduced to HK$6 billion if they have at least HK$250 million in sales in the financial year before their IPOs.